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2017 DIGILAW 545 (DEL)

D. B. P LIMITED v. D. H. A. F. P LIMITED

2017-02-14

DEEPA SHARMA

body2017
JUDGMENT : I.A.11750/2016 (O 39 R 1 & 2 by plaintiff) & I.A. 12871/2016 (O 7 R 11 by D-6) 1. The case is taken up on the direction of Division Bench in FAO No. 31/2017. 2. Arguments on the application under Order 7 Rule 11 of CPC was heard at length. During the course of the arguments, the Court was of the opinion that since the facts pleaded are not clear enough to disclose when actually the cause of action arose and since the plaintiff had claimed that their knowledge was from the date of the report of Economic Offences Wing (EOW), while the defendants contend that the plaintiff had the knowledge from the earlier dates when the property in dispute as per the report of EOW was demolished in the year 1997 and, therefore, the suit is barred. The defendants have also raised an issue of limitation in their written statement. While disposing of the application under Order 7 Rule 11, the Courts are required to confine its findings only on the averments in the plaint and the contentions raised in the written statements and the documents filed by the defendants cannot be considered. In view of the limited jurisdiction of the Court under this provision of law, the Court is of the opinion that the applications stands disposed of with direction that the issue framed regarding limitation shall be treated as a preliminary issue. 3. Arguments of the parties are also heard on the application under Order 39 Rule 1 & 2. 4. The contentions of the plaintiff is that defendant no. 1 had purchased this property in a court auction and thereafter defendant no. 1 had mortgaged the part of the property to the plaintiff for a sum of Rs. 65 lacs on 19.05.1997 and also handed over the title deeds of the suit property. Mr. R.K. Nanda (Defendant no. 5) also executed a possession letter on 19.05.1997. It is also contended by the plaintiff that Mr. R.K. Nanda and his wife had entered into a shareholder agreement with the set of shareholders to sell their shares to them but a dispute arose between the plaintiff and Mr. Mr. R.K. Nanda (Defendant no. 5) also executed a possession letter on 19.05.1997. It is also contended by the plaintiff that Mr. R.K. Nanda and his wife had entered into a shareholder agreement with the set of shareholders to sell their shares to them but a dispute arose between the plaintiff and Mr. R.K. Nanda qua this agreement and the matter went before Company Law Board who gave its finding on 11.03.2014 whereby declaring that the shareholder agreement was valid and thereafter the plaintiff had started to sue the various parties for the wrong doing of Mr. R.K. Nanda, the earlier shareholder of plaintiff company. The plaintiff learnt that the suit property was transferred by Mr. R.K. Nanda through various defendants and finally to defendant no. 6. It is submitted that Mr. Arun Mehra, the Director and shareholder of plaintiff company, learnt that the part of the suit property i.e. top floor and the basement were secured to plaintiff company in the year 1997 at the time when plaintiff company was owned by Mr. R.K. Nanda and others against the mortgage amount and the possession of these floors was also handed over to the plaintiff company. The original sale deed of the suit property was also found in possession of the plaintiff company. It is stated that now he has learnt that the defendants, in connivance with Mr. R.K. Nanda and each other are in the process of demolishing the suit property including the portion of the property secured to the plaintiff. It is prayed that the plaintiff has prima facie case in his favour since the portion of this property is a security against the mortgaged amount, in possession of the plaintiff and that the balance of convenience also lies in his favour and that he shall suffer irreparable loss and injury. It is contended that defendant Nos. 2, 3 and 6 and their employees, representatives, agents, etc be restrained by way of ad-interim injunction from selling, transferring, alienating, altering or parting with possession of property Plot No.11, Ring Road, Lajpat Nagar-IV, New Delhi - 110024 in any manner whatsoever to any person. Learned counsel for the plaintiff has relied during the course of the arguments on Section 68 of the Transfer of Property Act and alleged that the property which was a security is needed to be protected. 5. Reply has been filed only by defendant no. Learned counsel for the plaintiff has relied during the course of the arguments on Section 68 of the Transfer of Property Act and alleged that the property which was a security is needed to be protected. 5. Reply has been filed only by defendant no. 6 and by no other defendants. Arguments however have been addressed by all the defendants. Defendant no. 6 has contended that he is the bona fide purchaser of the suit property and he was never informed that the property was under any mortgage. It is further submitted that the plaintiff’s claim can only be for the refund/payment of mortgage money but the plaintiff has not placed on record any mortgage deed and proof of payment of Rs. 65 lacs in the mortgage transaction and thus has no prima facie case in his favour. It is further submitted that since he is a bona fide purchaser of the property and that the plaintiff was very well aware of the fact since this fact was recorded in the closure report of the FIR, yet have suppressed the material facts from the knowledge of this Court. It is further submitted that the property was demolished in 1997 and this fact was within the knowledge of the plaintiff and he has suppressed this fact. It is further submitted that after demolition of the property in 1997, the property became a plot on which plaintiff never had any claim and despite the fact that such demolition was within his knowledge, he did not came forward for security of the money under mortgage. The property was sold only after its demolition. The plaintiff on 16.05.2013 was very well aware of the sale of the property to defendant no.6. 6. It was also contended that the suit is barred by limitation and also does not disclose any cause of action therefore no relief can be granted to the plaintiff since he has no right, title or interest in the suit property and thus has no prima facie case in his favour. Learned counsel for the defendants has also submitted that Section 68 of Transfer of Property Act gives the right to the mortgagee to sue for the mortgaged money. 7. Learned counsel for defendants 2 to 4 has submitted that in a suit no. Learned counsel for the defendants has also submitted that Section 68 of Transfer of Property Act gives the right to the mortgagee to sue for the mortgaged money. 7. Learned counsel for defendants 2 to 4 has submitted that in a suit no. 612/2001 titled as MGF vs. Durga Builders Pvt. Ltd and Ors wherein the plaintiff was one of the defendant, the plaintiff had admitted that the plot had been sold to a third party. It is submitted on behalf of the defendants that although they have disputed the existence of such mortgage, they however are ready to deposit the money under mortgage with the Registrar General of this Court and now since the mortgage money is secured, the plaintiff has no prima facie case in his favour and is not entitled for any injunction. 8. I have heard the parties and given due consideration to the pleadings of the parties. 9. In order to be entitled for ad-interim injunction, the plaintiff has to show three ingredients i.e. existence of prima facie case, balance of convenience and irreparable loss and injury. The whole case of the plaintiff is based on a mortgage allegedly took place on 19.05.1997 whereby defendant no. 1 had pledged/mortgaged the suit property to plaintiff for a sum of Rs. 65 lacs. The contention of plaintiff is that defendant no. 1 had also handed over the possession of two floors (top floor and the basement) to the plaintiff on 19.05.1997 at the time when the mortgage was created. For this purpose, the plaintiff has relied on the document which is a letter of possession which was allegedly executed on a stamp paper by defendant no. 1 and has placed it at page no. 116 of his plaint. The court has perused this document which bears the date of purchase of stamp paper as 17.05.1997 while the contention of the plaintiff is that the possession of the mortgage property was handed over after the mortgage was entered into between the parties which was on 19.05.1997. The Court found it strange that the stamp paper for handing over the possession of the property under mortgage which was allegedly done on 19.05.1997 was purchased on a prior date. In this case, according to the plaintiff the mortgage was created by handing over the title deeds as well as the part of the suit property. 10. The Court found it strange that the stamp paper for handing over the possession of the property under mortgage which was allegedly done on 19.05.1997 was purchased on a prior date. In this case, according to the plaintiff the mortgage was created by handing over the title deeds as well as the part of the suit property. 10. Even otherwise, the question is what right a mortgagee has against the mortgagor? Chapter IV of Transfer of Property Act deals with the MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES. 11. This right includes only the right to recover the mortgaged money. It is a settled proposition of law that in a mortgage, the property secured is only a security and the mortgagee does not have any interest in the mortgaged property other than that it is a secured property against his mortgage for which the mortgagee can sue the mortgagor. 12. Section 68 of the Transfer of Property Act clearly lays down a situation in which the right to sue the mortgaged money arises in favour of the mortgagee and those cases are enumerated in Clauses 1 (a) to 1 (d). The only rights given to the mortgagee is to ensure the payment of the money under mortgage and till it is done, it can seek the continuation/restoration of the security. 13. From the contentions of the parties, it is clear that there are several contentious issues like whether there was any mortgage on 19.05.1997, whether this property was demolished in the year 1997 and this fact was within the knowledge of the plaintiff and despite the fact that the plaintiff lost possession of its security in the year 1997, he kept silent. Whether the plaintiff was aware of the subsequent transfers of the property to the various purchasers or not. Besides this, there are other contentious issues between the parties. Whether the plaintiff was aware of the subsequent transfers of the property to the various purchasers or not. Besides this, there are other contentious issues between the parties. Since the mortgagee’s right is only limited to the recovery of his mortgaged amount and since the defendants are ready to secure the alleged mortgaged money by depositing the same with the court without prejudice to their rights and since the plaintiff has no right, title or interest in the suit property other than that part of it was a security against the alleged mortgaged amount, I find no prima facie case in favour of the plaintiff to restrain the defendants from raising any construction over the suit property when the defendants had offered to deposit the alleged amount under the mortgage with the Registrar General of the Court without prejudice to their rights. 14. Since the defendants claimed to be the bonafide purchaser of the property and have a right in the property, they would be put to inconvenience when they had undertaken to deposit the mortgaged money in the court. Also, it is the defendants who shall suffer the irreparable loss and injury if the stay be granted to them. 15. In view of this, I find no ground to grant ad interim injunction in favour of the plaintiff. The application is dismissed subject to defendant depositing an amount of Rs.65,00,000/- with the Registrar General within seven days from today with information to the plaintiff of such deposit. 16. Nothing in this order shall tantamount to an expression of opinion on the merit of the case. CS(OS) 484/2016 List the matter on 27.03.2017.